• Saturday, December 09, 2023
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Naira strengthens amid low FX turnover


Naira, Nigeria’s currency on Friday recovered from Thursday’s loss, gaining 0.52 percent amid low dollar supply at the Investors and Exporters (I&E) forex window, Nigeria’s official foreign exchange market.

The daily foreign exchange market turnover declined by 78.16 percent to $48.67 million on Friday from $222.84 million recorded on Thursday.

After trading on Friday, Naira/dollar exchange rate closed at N427.75/$ compared to N425.75 closed on Thursday at the I&E window, data obtained from the FMDQ indicated.

Most foreign exchange market dealers who participated in the auction on Thursday maintained bids at N410.00 (low) and N444 (high).

At the parallel market, also known as the black market, the local currency depreciated by N1 to N615 per dollar (selling price) from N614 (buying price).

The persistent pressure on Naira has been attributed to increased demand for the greenback by the users amid shortage.

Nigeria’s external reserves, which give the Central Bank of Nigeria (CBN) the muscle to defend the naira, have declined by 3.0 percent year to date to $39.25 billion as of July 4, 2022 from $40.5 billion recorded at the beginning of the year.

At the money market on Friday, the Overnight (O/N) rate remained unchanged at 14.00 percent, while the Open Repo (OPR) decreased by 0.17 percent to close at 13.83 percent as against the last close of 14.00 percent on Thursday.

Read also: Naira weakens despite 172.95% rise in dollar liquidity

The Nigerian treasury bills secondary market closed on a flat note on Friday with the average yield across the curve closing flat at 6.98 percent. Average yields across short-term, medium-term, and long-term remained unchanged at 10.00 percent, 6.59 percent, and 6.11 percent, respectively, according to a market report by FSDH research.

In the Open Market Operation (OMO) bills secondary market, the average yield across the curve closed flat at 6.53 percent. Average yields across short-term and long-term maturities remained unchanged at 7.64 percent and 5.78 percent, respectively.

FGN bonds secondary market closed on a mildly negative note on Friday, as the average bond yield across the curve cleared higher by 4 bps to close at 11.62 percent from 11.58 percent on the previous day. Average yields across medium tenor and long tenor of the curve expanded by 4 bps each. However, the average yield across short tenor of the curve declined by 1 basis point.